Beef Buzz News
Cattle Prices Benefiting from Aggressive Marketings and Lower Carcass Weights
Thu, 19 May 2016 22:00:26 CDT
A lot has changed in the cattle market since this point last year when record fed cattle weights caused a surplus in beef supply and a drastic drop in prices. Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, says feedlots are now doing a better job of marketing cattle in a timely manner and beef prices are starting to reflect it.
“The situation is quite different now compared to what it was most of last year, in that feedlots have an incentive to pull cattle forward,” he says. “They’ve done that; they’ve marketed cattle aggressively - which initially put additional supply on the market and weighed on prices in April - but then following that we’re very current right now. Carcass weights have come down, and so we’ve seen this little rally in the markets recently.”
Demand for beef will continue to play an important role in the equation, and Peel says this time of year provides several opportunities for featurings during the Memorial Day and Father’s Day weekends.
“Demand is key to this thing because we did put more supply on the market early,” he says. “It did weigh on prices, but the good news is that quantity came through and we moved that meat through the system.
“There is a good indication now that we probably have not only moved meat currently but forward priced quite a bit of meat, taking advantage of those lower prices that existed say two to three weeks ago.”
Looking ahead to the second half of 2016, Peel says the current market conditions put the beef industry in a good position for the third and fourth quarters.
‘What we’re doing now really has the potential to set us up and stay in better shape as we go into the second half of the year,” he says. “The key is the fact that we’ve pulled these carcass weights down so dramatically from the record levels last fall. We’ve seen about a 62 lb. drop in steer carcass weights.”
Click on the LISTEN BAR below to hear Peel talk more about the impact carcass weights can have on the beef market during the latest Beef Buzz.
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